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Clause 3 — Abolition of starting and savings rates and creation of starting rate for savings

Part of Orders of the Day – in the House of Commons at 8:45 pm on 28th April 2008.

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Photo of Jeremy Browne Jeremy Browne Shadow Minister (Treasury) 8:45 pm, 28th April 2008

Yes, is my answer to that. [Interruption.] Well, I have never claimed anything else. People were asking what the Liberal Democrats were going to propose at a general election in two years' time, and I was doing my best to say that our instincts are that people with low earnings should be assisted and pay a lower proportion of their wages in tax than they currently do.

The Government have not addressed a fourth point to our satisfaction. They have all this talk about compensating people who are "average" losers, which seems an entirely nebulous concept. If one person has no money and another is a millionaire, their average wealth is £500,000, but that figure does not reflect the circumstances of either person. The Government talk about "average" losers, but some people may be overcompensated and end up with more money as a result of the package than if the 10p rate had been kept in place. Other people will not be adequately compensated. We need to hear further details about precisely how the compensation will work.

Furthermore, we need to know how the mechanisms will work—full stop. We seem to have a new concept for compensating pensioners called the summer fuel allowance, which will run from April until September or October and make sure that pensioners stay warm enough in July and August. That seems a strange and blunt instrument. The minimum wage is talked about as a way of addressing problems, but that is not necessarily entirely in the Government's hands to deliver. The Low Pay Commission has a say, and the burden is borne by employers and not by the Government in the form of the taxpayer.

On face value, the package of proposals put before us as a result of the lively meeting between Mr. Field and the Prime Minister leaves far too many questions unanswered to be satisfactory to any self-respecting Labour MP.

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